Labour rebels hold Budget to ransom

Frank Field leads a new revolt against abolition of 10p starting rate for income tax

Ministers are trying to head off another damaging back-bench Labour revolt today – this time over Gordon Brown's decision in 2007 to abolish the 10p starting rate of income tax. Alarm bells were ringing among Labour whips after 30 of the party's MPs backed a call for full compensation for the low-paid workers who lost out in Mr Brown's final Budget as chancellor in 2007.

They signed an amendment to the Finance Bill which implements this year's Budget. The rebels include Blairites Siobhain McDonagh and Sally Keeble and left-wingers Diane Abbott, Alan Simpson and John McDonnell.

If the amendment is passed, the Budget could not become law – and taxes could not be collected – until all those who lost money from the 10p tax fiasco had been compensated.

The Tories and Liberal Democrats will support the rebels, who would need 32 Labour MPs to vote against the Government to succeed. Defeat would embarrass the Prime Minister, whose authority has been weakened by Commons reversals over residence rights for Gurkha veterans and the Bill to clean up politics after the expenses scandal, and by climbdowns ahead of votes on the Iraq war inquiry and the partial sell-off of the Royal Mail. Frank Field, a former minister for Welfare Reform, and Greg Pope, a former Labour whip, are leading the rebellion.

Mr Field claimed that despite the Government's decision to raise tax allowances to help some of the nine million people who lost out when the 10p tax rate was abolished, 1.3 million people would still be worse off by 2012 and the Government had made "no move" to help them directly.

Mr Brown scrapped the 10p rate to help finance a cut in the basic rate of tax from 22p to 20p in the pound.

Mr Field said: "The Budget debate gives MPs the last chance they will have this side of the general election to deliver justice for the lowest paid workers ... "

Downing Street said the Government had already helped affected workers. The rebels say more than one million people are £1 worse off each week. Treasury ministers say the tax system is too complicated to compensate them all individually.

Brown's 10p tax: Cost of climbdowns

*March 2007

Gordon Brown announces the abolition of the 10p income tax rate in his final Budget as chancellor.

*April 2008

Scrapping of 10p rate takes effect.

*May 2008

Alistair Darling announces £2.7bn compensation package for affected workers, raising the personal threshold for basic-rate taxpayers by £600, making them £120 better off.

*November 2008

Darling announces that the compensation will be made permanent, at a cost of £270m in the 2009-10 financial year.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
News
Andy Davidhazy at the beginning (left) and end (right) of his hike
video
News
Taylor Swift is applying to trademark song lyrics from 1989
people
Voices
The popularity of TV shows such as The Liver Birds encouraged Liverpudlians to exaggerate their Scouse accent
voicesWe exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor
Life and Style
Parker says: 'I once had a taster use the phrase 'smells like the sex glands of a lemming'. Who in the world can relate to that?'
food + drinkRobert Parker's 100-point scale is a benchmark of achievement for wine-makers everywhere
News
i100
  • Get to the point
2015 General Election
May2015

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Junior Web Designer - Client Liaison

£6 per hour: Recruitment Genius: This is an exciting opportunity to join a gro...

Recruitment Genius: Service Delivery Manager

Negotiable: Recruitment Genius: A Service Delivery Manager is required to join...

Recruitment Genius: Massage Therapist / Sports Therapist

£12000 - £24000 per annum: Recruitment Genius: A opportunity has arisen for a ...

Ashdown Group: Practice Accountant - Bournemouth - £38,000

£32000 - £38000 per annum: Ashdown Group: A successful accountancy practice in...

Day In a Page

Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor
How to make your own Easter egg: Willie Harcourt-Cooze shares his chocolate recipes

How to make your own Easter egg

Willie Harcourt-Cooze talks about his love affair with 'cacao' - and creates an Easter egg especially for The Independent on Sunday
Bill Granger recipes: Our chef declares barbecue season open with his twist on a tradtional Easter Sunday lamb lunch

Bill Granger's twist on Easter Sunday lunch

Next weekend, our chef plans to return to his Aussie roots by firing up the barbecue
Joe Marler: 'It's the way I think the game should be played'

Joe Marler: 'It's the way I think the game should be played'

The England prop relives the highs and lows of last Saturday's remarkable afternoon of Six Nations rugby
Cricket World Cup 2015: Has the success of the tournament spelt the end for Test matches?

Cricket World Cup 2015

Has the success of the tournament spelt the end for Test matches?
The Last Word: Justin Gatlin knows the price of everything, the value of nothing

Michael Calvin's Last Word

Justin Gatlin knows the price of everything, the value of nothing